The Guardian tells us that very democracy itself is in peril over the vanishing of local journalism:

In the past Akoto might have stopped off at the market town’s local newspaper office on the campaign trail. But the main Trowbridge office of the Wiltshire Times, part of Newsquest and ultimately US-based media group Gannett, closed in 2019 and was redeveloped for housing.

These days political campaigns are as likely to target local voters on social media as through the columns of regional newspapers or local radio or television, where cutbacks mean far fewer journalists having to cover larger areas.

According to the Charitable Journalism Project, there are probably fewer local newspapers in Britain now than at any time since the 18th century, and the number continues to decline: more than 320 local titles closed between 2009 and 2019 as local newspaper advertising revenue fell 70% between 2010 and 2020.

This is terrible, something must be done etc.

We suggest - nay, insist - that that what be that the billion quid in the Scott Trust Ltd, the endowment that supports The Guardian’s losses, should be directed toward saving local journalism.

You see, we’ve this awful habit. We read links. And footnotes. We even read reports referred to in links and footnotes. Such as this:

An independent report on the future of the British media by Dame Frances Cairncross in 2019 warned the industry’s collapse poses a threat to the long-term sustainability of democracy and concluded there should be an investigation into the dominance of Facebook and Google in the advertising marketplace.

Well, yes, sorta. That Caincross report is one of the very few that we’ve seen that gets to the economic nub of the matter concerning local newspapers:

The starting point for the financial problems of news publishers was the collapse of revenues from print advertising. Print newspapers have traditionally carried advertising in two main forms: display advertising – commercial adverts and spreads in the main section of newspapers; and classifieds – job vacancies, services for hire, car and house sales. The transaction of buying and selling advertising space generally involved only two parties: the advertiser and the publisher. In 2007, advertising in the national and local press brought in £4.6 billion, and accounted for 40% of total UK advertising spend.111 In 2017, the share of advertising appearing in the printed press had fallen from 40% to 12%, and generated £1.4 billion in expenditure – a fall of 70% compared to 2007.

Further:

Perhaps more fundamentally, it is local media, more than any other, that has lost its comparative advantage in the advertising market to new online players. Local news publishers have always relied more on classified advertising than any other news publishers, for the simple reason that geographical proximity is what most local news readers have in common.

A point we have made a number of times both for UK local papers and the American Big City ones. Classifieds were the big revenue source and a much larger than that portion of gross margin that paid for the newsroom. The classifieds have disappeared online. And not, not really, to Google and Facebook, but:

And unfortunately for them, online competitors, first Gumtree and Autotrader,

Aha. So, the local papers are broke because classifieds have moved online and to different people. One of those is Autotrader. It is the capitalisation of selling off those classified ads - the capital value of Autotrader when sold was the fact that it has taken those ads - that created the £1 billion endowment at the Scott Trust Ltd which then funds The Guardian’s losses.

But, if the people who nicked - sure, by free competition in a time of technological change - the ad revenue are the people who should pay to preserve local journalism then it’s The Guardian that has to pay to preserve local journalism, right?

Can’t get away from that basic logic now, can we?

So, there we are, that’s solved then. The logic being shouted at us is that the people who took local journalism’s revenue must support local journalism. As that’s The Guardian then that’s The Guardian.

True, this might mean a reduction in Owen’s, George’s, Aditya’s salaries (we suspect that a reduction in their output would be too much to hope for) or contracts but there are silver linings to every cloud.

Tim Worstall